The idea of UrbanEmerge
The idea of starting a development consultancy migrated from the back to the forefront of my mind about a year ago (in 2016), when I picked up the idea and started envisionning UrbanEmerge. That was several months before the name was generously presented to me by Paul Honeybone, my PhD student at UCL. I showed him a list of words I’d been playing with (then struggling with) for a few days over lunch, and with ease he put together Urban & Emerge. I checked it on Google and bought it just in case. The name grew on me over the next couple of days before I fell in love with it.
It was around that time, a year ago, that I read Reinventing Organizations by Fredric Laloux. I felt it belonged with Ken Wilber’s works on my shelf — one of those few books that offers a glimpse of an emerging future I’d like to see manifest in the world.
I mentionned the book to Victor Vorski who’d not only read it but was a day away from launching Teal4Startups with Malek Jaber, a facebook group for entrepreneurs interested in reinventing organization to become more purpose-driven, humane and equitable. I joined the group and over the following months we shared lots of thoughts, ideas, articles and resources, such as this inspiring Flow diagram by Makek.
I was pleased (and reassured) to see the movement rapidly entering the mainstream. I enrolled on an online course by Julian Birkinshaw from London Business School called ‘Managing the company of the future’, about new emerging leadership models around the principles of self-management and emergence in lean organizations. Several courses on this theme were launched around that time.
I also enrolled on an inspiring online course by Otto Sharmer from MIT (introduced to me by Malek Jaber from T4S) called u.lab: Leading from the emerging future. It helped me increase awareness of myself, the present and our emerging future, and made me feel part of a global movement to co-create a better world.
A three-day intensive workshop by Sociocracy 3.0 allowed me to take the ideas of self-management and emergence from concepts to practice. S3 built on the oranizational structures and practices of Sociocracy to develop a framework (patterns) for self-managed organizations. The oranizational structure of UrbanEmerge began to crystallize around decision circles that emerge spontaneously when decisions that affect others need to be made. This is how self management and distributed leadership can emerge in an organization in the absence of a pre-determined and rigid hierarchy.
As I began to translate my new-found knowledge into an organizational structure for UrbanEmerge, I realized there was a gap in the shared wisdom: How to align the financial structure of an organization with these emerging values and principles.
It was then that I began to connect inequality in society with the financial structure of organizations: Inequality within organizations aggregates up to inequality between people in society.
My perspective from economic geography and urban planning attributes inequality to regional industrial composition (collective business experience and know-how that makes firms and industries in some regions more productive and innovative than others), and people’s access to the resources they need to be healthy, skilled/educated, connected and employed (which determines their income).
The role of urban economic development practice is therefore to steer the collection of firms in a region towards the tech-frontier, and to offer all urban residents access to secure and affordable housing, public transport, public services, quality education and vocational training. If this is done successfully, we unleash what we call urban agglomeration and localization economies.
It occured to me however, that even Silicon Valley, one of the richest and most technologically advanced regions in the world and the focus of our co-authored book titled “The rise and fall of urban economies: Lessons from San francisco and Los Angeles”, suffers from high levels of inequality. Yet its industrial structre was at the forefront of the tech-frontier and residents of the Bay Area, compared to many places around the world, had good access to the resources for achieving their potential. To be sure, improving the quality of schooling and reducing the cost of housing for the less well-off for example would likely reduce inequality, however inequality in the Bay Area cannot be entirely explained by access to the resources people need to find employment in the region (and certainly not by the distance of its industries to the tech-frontier).
It was obvious to me that the inequality was also due to how companies distribute the value they generate. Take facebook for example. It’s arguably a wonderful company that adds real value to many people’s lives, and Mark Zuckerberg and his partners are super-cool to have brough the idea from conception to market, and to offer the platform free of charge to over a billion people. But is Mark Zuckerberg’s contribution to co-creating facebook worth $63.3 Billion Dollars? That’s almost $5 Billion a year since the launch of facebook in 2004.
Don’t get me wrong, I am in no way disrespecting Mark Zuckerberg nor questionning his morals. In fact (if t’s not fake news) he has pledged to leave most of his wealth to charity at the end of his life. But what struck me was the inequality that a company was capable of generating by operating according to the rules and norms of business as usual. Moreover, it seemed to me that reducing inequality in society requires both a spatial-economic perspective as well as a deep look at how organizations distribute the value they generate.
So my attention turned to the financial structure of organizations. In a self-managed organization people set their own salaries in light of other costs, profits and what other people earn. This is working in many progressive organizations and seems to generate lower levels of inequality within firms (it would be great to conduct a robust study to test this hypothesis developed by Laloux’s observations of a small sample of ‘teal’ organizations).
But what about ownership and the distribution of profits?
As I was grappling with these questions I added another book to my shelf: SlicingPie by Mike Moyer. Mike developed a dynamic equity slicing model that allows entrepreneurs risking cash and unpaid work into a start-up to easily and fairly distribute the ‘pie’ they were baking.
I spent the next 3 monthts trying to adapt the model to a consultancy company. After re-inventing the model in far too complicated ways, I came full circle back to Mike’s original Slicing Pie, with one small tweak: To treat the commissions paid by consultants to UrbanEmerge during the start-up stage as cash investments into the business.
This occured to me the moment I was supposed to pay 10% of my first consulting project to UrbanEmerge. I realised that I had won and managed the project without the added-value of UrbanEmerge because it had not yet grown to generate the value it promises to offer its consultants in the future.
The pie today is worth about £80,000. As unpaid work is converted into pie at a multiplier of x2, it means that developing the vision, the business plan, the logo and the website cost about £40k in pro-rata salaries by predominantly myself (as the founder) and a share by Jonathan Wilkes playing the role of Finance Director. So if a Lead Consultant brings in a project worth £50k and pays 10% to UrbanEmerge (£5k), he or she would receive 4x £5,000 of Pie (£20,000) and would earn about 20% of the pie. Moreover, if someone joins our internal services division and helps us develop the digital services we envision, they would also earn slices of Pie, as their unaid salaries are also treated as investmnets into the start-up. So while ownership is not the primary motivator for joining UrbanEmerge, how we distribute the pie is fair.
The primary motivator for joining UrbanEmerge is the prospect of co-creating an organization that would enable us to better achieve our purpose and professional aspirations. I look forward to welcoming more people into UrbanEmerge so we can continue to co-create a purpose-driven organization that is more democratic, humane and equitable.